Downer EDI annual results to be hit by Germany's Senvion collapse

2 Min Read

Aug 1 (Reuters) - Downer EDI Ltd warned on Thursday that it expects a negative impact to its full year 2019 results following the insolvency of Germany’s Senvion SA, the company’s construction partner in the Murra Warra wind farm in Victoria.

Sydney-based Downer said wind turbine manufacturer Senvion’s bankruptcy would result in a charge of A$45 million ($30.83 million) for the full year, related to obligations for completing the wind farm.

In April, Senvion, which has more than a billion euros of debt, received approval for insolvency from a German court, as the Hamburg-based company faced delays and penalties related to big projects, while the wind industry as a whole has seen falling prices and increased competition.

Engineering services provider Downer had earlier said it expected profit after tax of A$352 million for the 2019 financial year, not including the Senvion impact.

The two parties are responsible for the construction and installation of 61 wind turbines in the Murra Warra wind farm, of which 36 have been erected, Downer said in a statement.

Downer said it has started discussions with all key stakeholders to establish a process for securing delivery of outstanding equipment and completing the wind farm project. ($1 = 1.4596 Australian dollars) (Reporting by Nikhil Subba in Bengaluru; Editing by Shounak Dasgupta)